What is the penalty for a participator who fails to file a petroleum revenue tax return on time under the Oil Taxation Act 1975?

Under Oil Taxation Act 1975 Schedule 2 paragraph 3, a participator who fails to deliver a petroleum revenue tax return on time faces an initial penalty of up to £500. If a court or tribunal formally declares the failure and the default continues, an additional daily penalty of up to £100 per day applies.

What happens if a participator's failure to file a PRT return continues beyond six months?

If six months pass from the original filing deadline without the return being delivered, the maximum penalty increases significantly. It rises from £500 to £500 plus the entire amount of petroleum revenue tax charged for the chargeable period, ensuring prolonged non-compliance carries a financial consequence proportionate to the tax at stake.

Can a participator avoid a penalty by filing a late PRT return before proceedings begin?

Yes, provided the delay has not exceeded six months past the filing deadline. If the participator submits the return before HMRC commences formal penalty recovery proceedings and within the six-month threshold, no penalty is payable. This safeguard gives participators an opportunity to remedy the default without financial sanction.

How does the daily default penalty work under OTA 1975 section 3?

The daily default penalty of up to £100 per day applies only after a court or the relevant tribunal has formally declared that the failure to file exists. Once that declaration is made, the penalty accrues for every day the participator continues not to deliver the return, in addition to the initial £500 and any enhanced penalty.

Oil Taxation Act 1975 section 3

Returns by participators

Schedule 2, paragraph 3 sets out the penalties that apply when a participator in an oil field fails to submit their petroleum revenue tax return on time.

A participator who fails to deliver a return on time faces an initial penalty of up to £500.
If the failure continues after a court or tribunal has formally declared it, an additional daily penalty of up to £100 applies for each day the default persists.
Where the failure extends beyond six months past the filing deadline, the maximum penalty increases to £500 plus the full amount of petroleum revenue tax charged for that period.
For shorter delays (under six months), no penalty is payable if the participator submits the return before penalty recovery proceedings begin.

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